Exhibit 99
OFG Bancorp Reports 4Q13 and 2013 Results
SAN JUAN, Puerto Rico, February 3, 2014 – OFG Bancorp (NYSE: OFG) today reported results for the fourth quarter and year ended December 31, 2013.
Highlights
· For the fourth quarter of 2013, income available to common shareholders amounted to $16.6 million, or $0.35 per share diluted. In the corresponding year ago period, OFG lost $23.3 million, or ($0.53) per share. This included $22.9 million in net costs for deleveraging its investment securities portfolio in relation to the acquisition of BBVA’s Puerto Rico operations in late 2012.
· With its strong 4Q13 performance, full year 2013 income available to common shareholders totaled $84.6 million, or $1.73 per share diluted, exceeding OFG’s guidance of $1.55 per share on a GAAP basis. In 2012, OFG earned $14.6 million, or $0.35 per diluted share. This included $12.9 million in net costs for deleveraging.
· 2013 results reflect the integration of BBVA PR, with the successful conversion of technology platforms and consolidation of other resources.
· Reflecting 2013 results, book value stood at $15.74 per common share as of December 31, 2013, having more than recovered from pre-acquisition levels of $15.40 at September 30, 2012.
· The Board of Directors increased OFG’s regular quarterly cash dividend per common share by 33%, to $0.08 per share, from $0.06 per share, for the fourth quarter of 2013, as previously announced.
· Puerto Rico government related loan and investment security contractual balances (excluding municipalities) fell 17.4% in line with scheduled maturities, to $631.6 million at December 31, 2013, from $764.8 million at September 30, 2013.
CEO Comment
“2013 was a stellar year for our Oriental banking, wealth management and insurance franchise in Puerto Rico, as we realized the benefits of our acquisition of BBVA PR,” said José Rafael Fernández, President, Chief Executive Officer and Vice Chairman of the Board.
“Operating income increased 190%, to $176.5 million, and despite new, locally legislated tax increases, we generated earnings per share of $1.73, well in excess of our $1.55 guidance.
“As envisioned, the acquisition has enhanced our capabilities significantly. We now have sophisticated corporate treasury services, scalable transactional banking, and a leading auto lending platform.
“We also have the ability to bring to market innovative product ‘firsts’ to Puerto Rico, such as Cuenta Libre (Freedom Account), which reimburses our customers for using ATMs outside of our network, and Foto Deposito, for depositing checks from their mobile devices.
“Our capital levels are strong at close to $900 million. We have considerable liquidity with more than $760 million of cash on hand. And more than half of our loan balances have assigned credit marks as part of purchase accounting.”
2013 Results (vs. 2012)
· Net interest income grew 160.5%, to $409.7 million from $157.3 million, as OFG transformed its revenue profile, with investment securities producing only 10.1% of interest income in 2013 versus 36.6% in 2012.
· Total banking and financial services revenues increased 74.6%, to $85.3 million from $48.8 million, due to more products and services and a larger customer base.
· Operating expenses (excluding merger and restructuring costs) remained on target, averaging $61.8 million per quarter, despite $5.4 million in new gross proceeds taxes in 2013.
· Performance metrics compare well to other publicly traded banks. Return on average assets increased to 1.16% from 0.37%, return on average tangible common stockholders’ equity increased to 14.30% from 2.36%, and the efficiency ratio improved to 53.45% from 64.05%.
· OFG’s capital position strengthened across the board, with increases in all regulatory ratios, as they continued to be significantly above requirements for a well-capitalized institution. Tangible common equity to total tangible assets was 7.56%, increasing from 6.45%, leverage capital ratio of 9.11% grew from 6.55%, tier 1 risk-based capital ratio expanded to 14.36% from 13.18%, and total risk-based capital ratio rose to 16.15% from 15.40%.
· Credit quality is strong. Approximately 52% of loans have been acquired in recent acquisitions and are covered by loss share agreements and/or carry credit marks. Total delinquency fell to 8.92% at December 31, 2013 versus 17.65% a year-ago, partly due to the sale of non-performing residential mortgages in the third quarter of 2013.
· Non-maturing deposit balances increased 4.9%, to $3.2 billion, while higher-priced time deposits declined 21.4% as part of efforts to reduce the cost of deposits, which averaged 0.73% in 2013 compared to 1.24% in 2012.
· This has enabled OFG to be among industry leaders with a Net Interest Margin of 5.46% in 2013, up from 2.67% in 2012.
4Q13 Results (vs. 3Q13)
Income Statement
· Total interest income of $132.1 million increased 9.0%, while total interest expense of $21.4 million declined 2.8% and total provision of $12.6 million fell 2.9%. As a result, net interest income of $98.1 million grew 13.9%, and NIM expanded to 6.07% from 5.33%.
o Interest income from non-covered, acquired loans benefitted from:
· $4.6 million due to higher cash flows than expected in certain acquired loan pools;
· $2.9 million from reclassifying fees formerly recorded as banking service revenues, in accordance with our accounting policies; and
· $2.0 million from re-yielding of certain acquired loan pools, as part of the annual reforecast.
o Interest income from covered loans benefitted from an additional approximately $3.0 million due to higher recoveries than previously expected.
o Provision for loan and lease losses from non-covered loans increased $2.3 million due to lower cash flows in other pools of acquired loans, reflecting the previously mentioned annual reforecast.
· Total non-interest expenses increased 3.8%. Within that, merger and restructuring expenses of $4.4 million included a reserve to cover already planned integration and consolidation-related activities for 2014. No additional merger and restructuring expenses are anticipated in 2014.
· Net amortization of the shared-loss indemnification asset related to the 2010 FDIC-assisted Eurobank acquisition increased $4.5 million, of which approximately $2.4 million was due to higher covered loan cash flows mentioned above. OFG actively monitors cash flow experience and amortizes the associated FDIC indemnification asset in line with the loss share durations. As of December 31, 2013, the net indemnification asset was $170.7 million.
· The effective income tax rate, in line with recent local tax increases, was 32.13%, compared to 25.13% in the preceding quarter, which benefitted from one-time items from BBVA PR tax positions and re-measured purchase accounting adjustments.
PR Government Related Loans, Investment Securities and Deposits
· The decline in OFG’s balance of Government related loans and investment securities was in line with contractual maturities of $142.5 million.
· The Company plans to use the maturity schedule to continue to strategically reduce these balances.
· Nearly all of OFG’s Government related loans and investment securities have well-defined sources of repayment and collateral.
· Government related deposits declined to $334.9 million at December 31, 2013, from $491.7 million at September 30, 2013.
Credit Quality
· Quarter over quarter increases in credit metrics largely reflect higher average loans held for investment (excluding acquired loans) of $2.4 billion at December 31, 2013, up 13.9% from September 30, 2013.
· Non-performing loans of $86.2 million increased $6.6 million.
· The allowance for loan and lease losses (excluding acquired loans) of $49.1 million increased 3.1%.
· Net charge offs totaled $5.4 million, up $0.4 million, while the net charge off rate of 0.92% declined 6 basis points.
Outlook
“With core operating results for the fourth quarter and 2013 much stronger than in the year earlier periods, OFG ended 2013 as a top performing financial institution,” CEO Fernández said.
“We have approached Puerto Rico’s challenging economic conditions, which have prevailed since 2006, in a rational and disciplined manner. We are confident that we will continue to be successful in further optimizing our businesses for profitability and capital generation.
“Looking ahead, we believe our 2013 fourth quarter core operating run rate is indicative of what our performance should be over the next few quarters. In 2015, when the non-cash charge off of FDIC indemnification asset amortization ends, OFG’s GAAP earnings should significantly expand.”
Conference Call
A conference call to discuss OFG’s results for the fourth quarter of 2013, outlook and related matters will be held Tuesday, February 4, 2014 at 10:00 AM Eastern Time. The call will be accessible live via a webcast on OFG’s Investor Relations website at www.ofgbancorp.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.
Full Financial Tables
Full financial tables for 4Q13 and 2013 can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com.
Forward Looking Statements
The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and
uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to (i) difficulties in integrating BBVA PR into OFG’s operations; (ii) the amounts by which our assumptions related to the acquisition fail to approximate actual results; (iii) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (iv) changes in interest rates, as well as the magnitude of such changes; (v) the fiscal and monetary policies of the federal government and its agencies; (vi) changes in federal bank regulatory and supervisory policies, including required levels of capital; (vii) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in Puerto Rico; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) possible legislative, tax or regulatory changes; and (xi) difficulties in combining the operations of any other acquired entity.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, see OFG’s annual report on Form 10-K for the year ended December 31, 2012, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
About OFG Bancorp
Now in its 49th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S. and Puerto Rico banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a full range of commercial, consumer and mortgage banking services, as well as financial planning, trust, insurance, investment brokerage and investment banking services, primarily in Puerto Rico, through 55 financial centers. Investor information can be found at www.ofgbancorp.com.
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Contacts
Puerto Rico: Alexandra López (allopez@orientalbank.com), OFG Bancorp, (787) 522-6970
US: Steven Anreder (steven.anreder@anreder.com) and Gary Fishman (gary.fishman@anreder.com), Anreder& Company, (212) 532-3232
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OFG Bancorp | |
Financial Supplement | |
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The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2013 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission. | |
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Table of Contents | |
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| OFG Bancorp (Consolidated Financial Information) | | | |
| Table 1: | | Financial and Statistical Summary | | 1-2 | |
| Table 2: | | Statements of Operations | | 3 | |
| Table 3: | | Statements of Financial Condition | | 4-5 | |
| Table 4: | | Information on Loans and Production | | 6 | |
| Table 5: | | Average Balances, Net Interest Income and Net Interest Margin | | 7-8 | |
| Table 6: | | Loan Information and Performance Statistics (Excluding Acquired Loans) | | 9-10 | |
| Table 7: | | Allowance for Loan and Lease Losses | | 11 | |
| Table 8: | | Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired | | | |
| | | with Deteriorated Credit Quality, Including those by Analogy) | | 12 | |
| Table 9: | | Reconciliation of Non-GAAP Measures and Calculation of Regulatory | | | |
| | | Capital Measures | | 13-14 | |
| Table 10: | | Notes to Financial Statements, Statistical Summary, and Loan Information | | 15 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (2)(3) |
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 | | 2013 | | 2012 |
(Dollars in thousands, except per share data) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 | | YTD | | YTD |
Earnings | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 110,671 | | $ | 99,091 | | $ | 106,295 | | $ | 93,616 | | $ | 43,410 | | $ | 409,672 | | $ | 157,291 |
Non-interest income (loss), net | (4) | | | 17,646 | | | 19,327 | | | 26,836 | | | 22,970 | | | (8,580) | | | 86,780 | | | 54,298 |
Gross revenues | | | | 128,317 | | | 118,418 | | | 133,131 | | | 116,586 | | | 34,830 | | | 496,452 | | | 211,589 |
Provision for loan and lease losses, excluding acquired loans | (1) (21) | | | 6,934 | | | 6,930 | | | 35,919 | | | 5,795 | | | 3,454 | | | 55,578 | | | 23,681 |
Provision for acquired loan and lease losses | (1) | | | 5,659 | | | 6,044 | | | 2,819 | | | 2,793 | | | 982 | | | 17,316 | | | - |
Total provision for loan and lease losses | | | | 12,593 | | | 12,974 | | | 38,738 | | | 8,588 | | | 4,436 | | | 72,894 | | | 23,681 |
Net revenues | | | | 115,724 | | | 105,444 | | | 94,393 | | | 107,998 | | | 30,394 | | | 423,558 | | | 187,908 |
Operating expenses | | | | 61,238 | | | 61,021 | | | 63,548 | | | 61,275 | | | 36,293 | | | 247,082 | | | 127,040 |
Operating income | | | | 54,486 | | | 44,423 | | | 30,845 | | | 46,723 | | | (5,899) | | | 176,476 | | | 60,868 |
FDIC shared-loss expense, net | | | | 20,466 | | | 15,965 | | | 19,965 | | | 12,871 | | | 9,517 | | | 69,267 | | | 28,022 |
Merger and restructuring charges | (5) | | | 4,412 | | | 2,252 | | | 5,274 | | | 5,534 | | | 4,990 | | | 17,472 | | | 4,990 |
Net income (loss) before income taxes | | | | 29,608 | | | 26,206 | | | 5,606 | | | 28,318 | | | (20,406) | | | 89,737 | | | 27,856 |
Income tax expense (benefit) | (6) | | | 9,514 | | | 6,585 | | | (31,934) | | | 7,126 | | | (1,587) | | | (8,709) | | | 3,301 |
Net income (loss) | | | | 20,094 | | | 19,621 | | | 37,540 | | | 21,192 | | | (18,819) | | | 98,446 | | | 24,555 |
Preferred stock dividends | | | | (3,466) | | | (3,465) | | | (3,466) | | | (3,465) | | | (4,499) | | | (13,862) | | | (9,939) |
Net income (loss) available to common stockholders | | | $ | 16,628 | | $ | 16,156 | | $ | 34,074 | | $ | 17,727 | | $ | (23,318) | | $ | 84,584 | | $ | 14,616 |
Common Share Statistics | | | | | | | | | | | | | | | | | | | | | | |
Earnings (loss) per common share - basic | (7) | | $ | 0.36 | | $ | 0.35 | | $ | 0.75 | | $ | 0.39 | | $ | (0.53) | | $ | 1.85 | | $ | 0.35 |
Earnings (loss) per common share - diluted | (8) | | $ | 0.35 | | $ | 0.34 | | $ | 0.68 | | $ | 0.37 | | $ | (0.53) | | $ | 1.73 | | $ | 0.35 |
Common shares outstanding (period end) | | | | 45,677 | | | 45,661 | | | 45,640 | | | 45,621 | | | 45,580 | | | 45,677 | | | 45,580 |
Average common shares outstanding | | | | 45,674 | | | 45,927 | | | 45,630 | | | 45,595 | | | 43,827 | | | 45,706 | | | 41,626 |
Weighted average common shares outstanding and equivalents | | | | 52,987 | | | 53,322 | | | 52,968 | | | 52,892 | | | 51,084 | | | 53,033 | | | 45,304 |
Cash dividends per common share | (24) | | $ | 0.08 | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 | | $ | 0.26 | | $ | 0.24 |
Book value per common share (period end) | | | $ | 15.74 | | $ | 15.63 | | $ | 15.45 | | $ | 15.44 | | $ | 15.31 | | $ | 15.74 | | $ | 15.31 |
Tangible book value per common share (period end) | (9) | | $ | 13.29 | | $ | 13.18 | | $ | 12.99 | | $ | 13.00 | | $ | 12.86 | | $ | 13.29 | | $ | 12.86 |
Balance Sheet (Period End) | | | | | | | | | | | | | | | | | | | | | | |
Loans held for investment | (10) | | $ | 5,026,153 | | $ | 5,131,232 | | $ | 4,947,412 | | $ | 5,158,521 | | $ | 5,136,876 | | $ | 5,026,153 | | $ | 5,136,876 |
Interest-earning assets | | | | 7,222,472 | | | 7,443,742 | | | 7,427,877 | | | 7,729,988 | | | 8,190,213 | | | 7,222,472 | | | 8,190,213 |
Total assets | | | | 8,139,646 | | | 8,380,225 | | | 8,435,934 | | | 8,705,444 | | | 9,196,262 | | | 8,139,646 | | | 9,196,262 |
Interest-bearing liabilities | | | | 7,090,575 | | | 7,330,558 | | | 7,400,169 | | | 7,677,359 | | | 8,177,231 | | | 7,090,575 | | | 8,177,231 |
Total deposits | | | | 5,383,141 | | | 5,610,437 | | | 5,665,601 | | | 5,564,165 | | | 5,690,567 | | | 5,383,141 | | | 5,690,567 |
Borrowings | | | | 1,707,434 | | | 1,720,121 | | | 1,734,568 | | | 2,113,194 | | | 2,486,664 | | | 1,707,434 | | | 2,486,664 |
Stockholders' equity | | | | 884,913 | | | 879,726 | | | 870,924 | | | 870,242 | | | 863,606 | | | 884,913 | | | 863,606 |
Balance Sheet (Quarterly Average Balances) | | | | | | | | | | | | | | | | | | | | | | |
Average loans held for investment | (10) | | $ | 5,111,020 | | $ | 5,132,608 | | $ | 5,053,580 | | $ | 5,085,671 | | $ | 2,171,101 | | $ | 5,095,211 | | $ | 1,809,067 |
Average interest-earning assets | | | | 7,295,789 | | | 7,434,820 | | | 7,532,671 | | | 7,745,066 | | | 5,898,464 | | | 7,499,993 | | | 5,898,706 |
Average total assets | | | | 8,308,940 | | | 8,407,269 | | | 8,509,505 | | | 8,822,371 | | | 6,661,792 | | | 8,510,328 | | | 6,566,460 |
Average interest-bearing deposits | | | | 4,914,335 | | | 4,811,176 | | | 4,850,631 | | | 4,836,908 | | | 2,453,805 | | | 4,847,207 | | | 2,182,108 |
Average total deposits | | | | 5,535,090 | | | 5,654,271 | | | 5,612,807 | | | 5,593,726 | | | 2,737,102 | | | 5,598,964 | | | 2,389,661 |
Average borrowings | | | | 1,742,115 | | | 1,734,769 | | | 1,863,383 | | | 2,198,599 | | | 2,861,518 | | | 1,883,055 | | | 3,261,592 |
Average stockholders' equity | | | | 881,131 | | | 868,314 | | | 864,654 | | | 860,989 | | | 829,660 | | | 868,975 | | | 746,331 |
Average common stockholders' equity | | | | 715,261 | | | 702,444 | | | 698,784 | | | 695,112 | | | 671,558 | | | 703,104 | | | 638,634 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (Continued) (2)(3) |
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 | | 2013 | | 2012 |
(Dollars in thousands, except per share data) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 | | YTD | | YTD |
Performance Metrics | | | | | | | | | | | | | | | | | | | | | | |
Net interest income growth (quarter over quarter / year over year) | | | | 12% | | | -7% | | | 14% | | | 116% | | | 7% | | | 160% | | | 12% |
Non-interest income growth (quarter over quarter / year over year) | | | | -9% | | | -28% | | | 17% | | | 368% | | | -138% | | | 60% | | | 52% |
Total net revenue growth (quarter over quarter / year over year) | (23) | | | 10% | | | 12% | | | -13% | | | 255% | | | -49% | | | 125% | | | 15% |
Operating revenue growth (quarter over quarter / year over year) | (11) | | | 19% | | | 50% | | | -32% | | | 1107% | | | -118% | | | 218% | | | 57% |
Return on average assets | (12) | | | 0.97% | | | 0.93% | | | 1.76% | | | 0.96% | | | -1.13% | | | 1.16% | | | 0.37% |
Return on average tangible common stockholders' equity | (13) | | | 11.03% | | | 10.95% | | | 23.21% | | | 12.14% | | | -14.52% | | | 14.30% | | | 2.36% |
Efficiency ratio | (14) | | | 51.20% | | | 52.39% | | | 53.07% | | | 57.70% | | | 71.14% | | | 53.45% | | | 64.05% |
Effective income tax rate | (6) | | | 32.13% | | | 25.13% | | | -569.64% | | | 25.16% | | | 7.78% | | | -9.71% | | | 11.85% |
Full-time equivalent employees, period end | | | | 1,534 | | | 1,558 | | | 1,573 | | | 1,565 | | | 1,654 | | | 1,534 | | | 1,654 |
Credit Quality Metrics | (15) | | | | | | | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | $ | 49,080 | | $ | 47,573 | | $ | 45,701 | | $ | 42,334 | | $ | 39,921 | | $ | 49,080 | | $ | 39,921 |
Allowance as a % of loans held for investment | | | | 2.04% | | | 2.03% | | | 2.55% | | | 2.88% | | | 3.22% | | | 2.04% | | | 3.22% |
Net charge-offs | (21) | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 | | $ | 2,653 | | $ | 46,420 | | $ | 10,943 |
Net charge-off rate | (16) | | | 0.92% | | | 0.98% | | | 8.84% | | | 1.05% | | | 0.86% | | | 2.69% | | | 0.89% |
Early delinquency rate (30 - 89 days past due) | (17) (18) | | | 4.96% | | | 2.17% | | | 2.69% | | | 6.48% | | | 6.45% | | | 4.96% | | | 6.45% |
Total delinquency rate (30 days and over) | (17) (18) | | | 8.92% | | | 6.04% | | | 7.40% | | | 15.01% | | | 17.65% | | | 8.92% | | | 17.65% |
Capital Ratios | (19) | | | | | | | | | | | | | | | | | | | | | |
Leverage ratio | | | | 9.11% | | | 8.74% | | | 8.54% | | | 8.07% | | | 6.55% | | | 9.11% | | | 6.55% |
Tier 1 common ratio | | | | 10.45% | | | 10.24% | | | 10.09% | | | 9.56% | | | 9.36% | | | 10.45% | | | 9.36% |
Tier 1 risk-based capital ratio | | | | 14.36% | | | 14.24% | | | 14.12% | | | 13.42% | | | 13.18% | | | 14.36% | | | 13.18% |
Total risk-based capital ratio | | | | 16.15% | | | 16.03% | | | 16.19% | | | 15.45% | | | 15.40% | | | 16.15% | | | 15.40% |
Tangible common equity ("TCE") ratio | | | | 7.56% | | | 7.28% | | | 7.12% | | | 6.90% | | | 6.45% | | | 7.56% | | | 6.45% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 2: Consolidated Statements of Operations (2)(3) | | | | | | | |
| | Quarter Ended | | Year Ended |
| | | December 31, | | September 30, | | December 31, | | December 31, | | December 31, |
(Dollars in thousands, except per share data) (unaudited) | | | 2013 | | 2013 | | 2012 | | 2013 | | 2012 |
Interest income: | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC | | | $ | 92,565 | | $ | 87,655 | | $ | 26,740 | | $ | 352,133 | | $ | 80,023 |
Loans covered under shared-loss agreements with the FDIC | | | | 25,885 | | | 21,657 | | | 21,209 | | | 91,769 | | | 85,376 |
Total interest income from loans | | | | 118,450 | | | 109,312 | | | 47,949 | | | 443,902 | | | 165,399 |
Investment securities | | | | 13,607 | | | 11,789 | | | 16,494 | | | 49,730 | | | 95,409 |
Total interest income | | | | 132,057 | | | 121,101 | | | 64,443 | | | 493,632 | | | 260,808 |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | |
Core deposits | | | | 8,834 | | | 9,947 | | | 6,112 | | | 35,951 | | | 26,048 |
Brokered deposits | | | | 1,387 | | | 1,387 | | | 944 | | | 5,026 | | | 3,601 |
Total deposits | | | | 10,221 | | | 11,334 | | | 7,056 | | | 40,977 | | | 29,649 |
Borrowings | | | | 11,165 | | | 10,676 | | | 13,977 | | | 42,983 | | | 73,868 |
Total interest expense | | | | 21,386 | | | 22,010 | | | 21,033 | | | 83,960 | | | 103,517 |
Net interest income | | | | 110,671 | | | 99,091 | | | 43,410 | | | 409,672 | | | 157,291 |
Provision for loan and lease losses, excluding acquired loans | | | | 6,934 | | | 6,930 | | | 3,454 | | | 55,578 | | | 23,681 |
Provision for acquired loan and lease losses | | | | 5,659 | | | 6,044 | | | 982 | | | 17,316 | | | - |
Total provision for loan and lease losses, net | | | | 12,593 | | | 12,974 | | | 4,436 | | | 72,894 | | | 23,681 |
Net interest income after provision for loan and lease losses | | | | 98,078 | | | 86,117 | | | 38,974 | | | 336,778 | | | 133,610 |
Non-interest income: | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 7,795 | | | 12,183 | | | 4,539 | | | 44,656 | | | 13,794 |
Financial services revenues | | | | 7,839 | | | 7,394 | | | 7,516 | | | 30,924 | | | 25,350 |
Mortgage banking activities | | | | 1,912 | | | 2,098 | | | 2,563 | | | 9,689 | | | 9,705 |
Total banking and financial services revenues | | | | 17,546 | | | 21,675 | | | 14,618 | | | 85,269 | | | 48,849 |
FDIC shared-loss expense, net | | | | (20,466) | | | (15,965) | | | (9,517) | | | (69,267) | | | (28,022) |
Net gain (loss) on: | | | | | | | | | | | | | | | | |
Sales of securities and derivative activities | | | | (158) | | | (914) | | | (21,576) | | | (790) | | | 31,184 |
Early extinguishment of borrowings | | | | - | | | - | | | (1,740) | | | 1,061 | | | (26,052) |
Other | (20) | | | 258 | | | (1,434) | | | 118 | | | 1,240 | | | 317 |
Total non-interest income, net | | | | (2,820) | | | 3,362 | | | (18,097) | | | 17,513 | | | 26,276 |
Non-interest expense: | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 22,030 | | | 22,590 | | | 12,905 | | | 91,957 | | | 45,778 |
Rent and occupancy costs | | | | 8,944 | | | 8,270 | | | 4,832 | | | 34,496 | | | 17,530 |
Merger and restructuring charges | (5) | | | 4,412 | | | 2,252 | | | 4,990 | | | 17,472 | | | 4,990 |
General and administrative expenses | | | | 30,264 | | | 30,161 | | | 18,556 | | | 120,629 | | | 63,732 |
Total non-interest expense | | | | 65,650 | | | 63,273 | | | 41,283 | | | 264,554 | | | 132,030 |
Income before income taxes | | | | 29,608 | | | 26,206 | | | (20,406) | | | 89,737 | | | 27,856 |
Income tax expense (benefit) | | | | 9,514 | | | 6,585 | | | (1,587) | | | (8,709) | | | 3,301 |
Net income (loss) | | | | 20,094 | | | 19,621 | | | (18,819) | | | 98,446 | | | 24,555 |
Less: dividends on preferred stock | | | | (3,466) | | | (3,465) | | | (4,499) | | | (13,862) | | | (9,939) |
Net income (loss) available to common shareholders | | | $ | 16,628 | | $ | 16,156 | | $ | (23,318) | | $ | 84,584 | | $ | 14,616 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statements of Financial Condition (2)(3) | | | | | | | | |
| | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
Cash and cash equivalents | | | $ | 703,468 | | $ | 657,520 | | $ | 748,313 | | $ | 561,446 | | $ | 868,695 |
Securities purchased under agreements to resell | | | | 60,000 | | | 85,000 | | | - | | | 60,000 | | | 80,000 |
Investments: | | | | | | | | | | | | | | | | |
Trading securities | | | | 1,869 | | | 2,124 | | | 2,209 | | | 1,787 | | | 495 |
Investment securities available-for-sale, at fair value, with amortized cost of $1,575,043 | | | | | | | | | | | | | | | | |
(September 30, 2013 - $1,654,133; June 30, 2013 - $1,807,335; March 31, 2013 - $1,948,685; | | | | | | | | | | | | | | | | |
December 31, 2012 - $2,118,825): | | | | | | | | | | | | | | | | |
Mortgage-backed securities | | | | 1,439,539 | | | 1,526,485 | | | 1,650,165 | | | 1,837,613 | | | 2,000,012 |
Other investment securities | | | | 148,886 | | | 150,763 | | | 186,064 | | | 175,542 | | | 194,274 |
Total investment securities available-for-sale | | | | 1,588,425 | | | 1,677,248 | | | 1,836,229 | | | 2,013,155 | | | 2,194,286 |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 24,450 | | | 24,470 | | | 22,156 | | | 33,458 | | | 38,411 |
Other investments | | | | 65 | | | 65 | | | 66 | | | 66 | | | 73 |
Total investments | | | | 1,614,809 | | | 1,703,907 | | | 1,860,660 | | | 2,048,466 | | | 2,233,265 |
Securities sold but not yet delivered | | | | - | | | - | | | 16,732 | | | - | | | - |
Loans: | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC: | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | |
Puerto Rico Government and its dependencies | | | | 695,996 | | | 810,391 | | | 531,543 | | | 561,613 | | | 476,021 |
Other Commercial Loans | | | | 1,180,886 | | | 1,166,950 | | | 1,205,179 | | | 1,333,442 | | | 1,356,373 |
| | | | 1,876,882 | | | 1,977,341 | | | 1,736,722 | | | 1,895,055 | | | 1,832,394 |
Mortgage | | | | 1,484,168 | | | 1,472,824 | | | 1,527,852 | | | 1,575,103 | | | 1,607,083 |
Consumer | | | | 247,539 | | | 253,754 | | | 246,387 | | | 240,548 | | | 240,839 |
Auto and Leasing | | | | 1,060,603 | | | 1,065,749 | | | 1,067,071 | | | 1,068,081 | | | 1,061,253 |
Total loans receivable not covered under shared-loss agreements with the FDIC, gross | | | | 4,669,192 | | | 4,769,668 | | | 4,578,032 | | | 4,778,787 | | | 4,741,569 |
Less: Deferred loan costs (fees), net | | | | 1,035 | | | 120 | | | (831) | | | (2,138) | | | (3,463) |
Total loans receivable not covered under shared-loss agreements with the FDIC | | | | 4,670,227 | | | 4,769,788 | | | 4,577,201 | | | 4,776,649 | | | 4,738,106 |
Allowance for loan and lease losses on non-covered loans | | | | (54,298) | | | (49,614) | | | (46,625) | | | (42,720) | | | (39,921) |
Loans receivable held for investment, net | | | | 4,615,929 | | | 4,720,174 | | | 4,530,576 | | | 4,733,929 | | | 4,698,185 |
Mortgage loans held for sale | | | | 46,529 | | | 47,085 | | | 78,350 | | | 77,644 | | | 64,145 |
Total loans not covered under shared-loss agreements with the FDIC, net | | | | 4,662,458 | | | 4,767,259 | | | 4,608,926 | | | 4,811,573 | | | 4,762,330 |
| | | | | | | | | | | | | | | | |
Loans covered under shared-loss agreements with the FDIC | | | | 409,690 | | | 418,119 | | | 423,372 | | | 432,708 | | | 449,431 |
Allowance for loan and lease losses on covered loans | | | | (52,729) | | | (56,555) | | | (53,992) | | | (52,974) | | | (54,124) |
Loans covered under shared-loss agreements with the FDIC, net | | | | 356,961 | | | 361,564 | | | 369,380 | | | 379,734 | | | 395,307 |
Total loans, net | | | | 5,019,419 | | | 5,128,823 | | | 4,978,306 | | | 5,191,307 | | | 5,157,637 |
Other assets: | | | | | | | | | | | | | | | | |
FDIC shared-loss indemnification asset | | | | 170,731 | | | 207,908 | | | 236,472 | | | 266,958 | | | 286,799 |
Derivative assets | | | | 20,502 | | | 21,345 | | | 19,655 | | | 23,233 | | | 21,889 |
Prepaid expenses | | | | 16,403 | | | 16,967 | | | 23,568 | | | 22,852 | | | 26,047 |
Deferred tax asset, net | | | | 136,740 | | | 147,968 | | | 159,316 | | | 122,026 | | | 126,652 |
Foreclosed real estate and repossessed properties | | | | 102,607 | | | 94,086 | | | 91,267 | | | 87,802 | | | 80,257 |
Premises and equipment, net | | | | 82,903 | | | 83,145 | | | 84,300 | | | 83,461 | | | 84,997 |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 |
Accounts receivable and other assets | | | | 125,995 | | | 147,487 | | | 131,276 | | | 151,824 | | | 143,955 |
Total assets | | | $ | 8,139,646 | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statement of Financial Condition (Continued) (2)(3) | | | | | | | | |
| | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
Deposits: | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,137,881 | | $ | 2,177,091 | | $ | 2,294,639 | | $ | 2,183,790 | | $ | 2,447,152 |
Savings accounts | | | | 1,096,271 | | | 987,371 | | | 909,755 | | | 892,654 | | | 634,819 |
Time deposits | | | | 1,320,875 | | | 1,651,303 | | | 1,687,115 | | | 1,647,289 | | | 1,680,430 |
Brokered deposits | | | | 828,114 | | | 794,672 | | | 774,092 | | | 840,432 | | | 928,166 |
Total deposits | | | | 5,383,141 | | | 5,610,437 | | | 5,665,601 | | | 5,564,165 | | | 5,690,567 |
Borrowings: | | | | | | | | | | | | | | | | |
Short-term borrowings | | | | - | | | - | | | - | | | 60,829 | | | 92,210 |
Securities sold under agreements to repurchase | | | | 1,267,618 | | | 1,267,423 | | | 1,313,870 | | | 1,491,675 | | | 1,695,247 |
Advances from FHLB and other borrowings | | | | 339,806 | | | 340,010 | | | 292,306 | | | 432,642 | | | 543,268 |
Federal funds purchased | | | | - | | | 13,202 | | | 29,431 | | | 29,612 | | | 9,901 |
Subordinated capital notes | | | | 100,010 | | | 99,486 | | | 98,961 | | | 98,436 | | | 146,038 |
Total borrowings | | | | 1,707,434 | | | 1,720,121 | | | 1,734,568 | | | 2,113,194 | | | 2,486,664 |
Other liabilities: | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 14,937 | | | 16,741 | | | 16,701 | | | 24,024 | | | 26,260 |
Acceptances outstanding | | | | 23,042 | | | 31,881 | | | 30,571 | | | 32,512 | | | 26,996 |
Accrued expenses and other liabilities | | | | 126,179 | | | 121,319 | | | 117,569 | | | 101,307 | | | 102,169 |
Total liabilities | | | | 7,254,733 | | | 7,500,499 | | | 7,565,010 | | | 7,835,202 | | | 8,332,656 |
Stockholders' equity: | | | | | | | | | | | | | | | | |
Preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Common stock | | | | 52,707 | | | 52,691 | | | 52,689 | | | 52,671 | | | 52,671 |
Additional paid-in capital | | | | 538,071 | | | 538,231 | | | 538,105 | | | 537,500 | | | 537,453 |
Legal surplus | | | | 61,957 | | | 59,867 | | | 57,906 | | | 54,128 | | | 52,143 |
Retained earnings | | | | 133,629 | | | 122,747 | | | 111,292 | | | 83,739 | | | 70,734 |
Treasury stock, at cost | | | | (80,642) | | | (80,642) | | | (80,834) | | | (80,847) | | | (81,275) |
Accumulated other comprehensive income, net | | | | 3,191 | | | 10,832 | | | 15,766 | | | 47,051 | | | 55,880 |
Total stockholders' equity | | | | 884,913 | | | 879,726 | | | 870,924 | | | 870,242 | | | 863,606 |
Total liabilities and stockholders' equity | | | $ | 8,139,646 | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
Non-covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 1,998,913 | | $ | 2,091,796 | | $ | 2,445,112 | | $ | 2,776,136 | | $ | 2,914,527 |
Period-end carrying amount | | | | 1,832,210 | | | 1,904,324 | | | 2,203,272 | | | 2,497,576 | | | 2,610,177 |
Average carrying amount | | | | 1,883,340 | | | 2,155,889 | | | 2,368,459 | | | 2,555,217 | | | 400,203 |
Accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 420,646 | | | 494,286 | | | 566,642 | | | 791,360 | | | 861,065 |
Period-end carrying amount | | | | 435,442 | | | 517,842 | | | 585,700 | | | 811,113 | | | 891,190 |
Average carrying amount | | | | 515,909 | | | 544,097 | | | 836,818 | | | 853,260 | | | 128,000 |
Covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 812,672 | | | 861,900 | | | 897,184 | | | 931,923 | | | 989,236 |
Period-end carrying amount | | | | 356,961 | | | 361,564 | | | 369,380 | | | 379,734 | | | 395,307 |
Average carrying amount | | | | 358,158 | | | 366,703 | | | 374,611 | | | 391,003 | | | 408,366 |
| | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 3,232,231 | | | 3,447,982 | | | 3,908,938 | | | 4,499,419 | | | 4,764,828 |
Period-end carrying amount | | | | 2,624,613 | | | 2,783,730 | | | 3,158,352 | | | 3,688,423 | | | 3,896,674 |
Average carrying amount | | | | 2,757,407 | | | 3,066,689 | | | 3,579,888 | | | 3,799,480 | | | 936,569 |
| | | | | | | | | | | | | | | | |
Originated and other loans held for investment: | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 2,496,751 | | | 2,438,310 | | | 1,792,786 | | | 1,469,477 | | | 1,249,895 |
Period-end carrying amount | | | | 2,401,540 | | | 2,347,502 | | | 1,789,060 | | | 1,470,098 | | | 1,240,202 |
Average carrying amount | | | | 2,353,613 | | | 2,065,919 | | | 1,473,692 | | | 1,286,191 | | | 1,234,532 |
| | | | | | | | | | | | | | | | |
Total loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 5,728,982 | | $ | 5,886,292 | | $ | 5,701,724 | | $ | 5,968,896 | | $ | 6,014,723 |
Period-end carrying amount | | | | 5,026,153 | | | 5,131,232 | | | 4,947,412 | | | 5,158,521 | | | 5,136,876 |
Average carrying amount | | | | 5,111,020 | | | 5,132,608 | | | 5,053,580 | | | 5,085,671 | | | 2,171,101 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
Quarterly loan production | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 67,535 | | $ | 60,676 | | $ | 101,279 | | $ | 77,124 | | $ | 61,795 |
Commercial | | | | 156,898 | | | 365,300 | | | 104,538 | | | 74,101 | | | 56,270 |
Consumer | | | | 23,604 | | | 28,586 | | | 26,634 | | | 22,614 | | | 9,451 |
Auto and Leasing | | | | 84,639 | | | 94,967 | | | 94,737 | | | 100,981 | | | 20,011 |
Total | | | $ | 332,676 | | $ | 549,529 | | $ | 327,188 | | $ | 274,820 | | $ | 147,527 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | | |
| | | 2013 Q4 | | 2013 Q3 | | 2013 Q2 | | 2013 Q1 | | 2012 Q4 | |
| | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
(Dollars in thousands) (unaudited) | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents and securities purchased under agreements to resell | | | $ | 532,753 | | $ | 366 | | 0.27 | % | | $ | 538,094 | | $ | 241 | | 0.18 | % | | $ | 541,038 | | $ | 242 | | 0.18 | % | | $ | 551,242 | | $ | 308 | | 0.22 | % | | $ | 968,490 | | $ | 474 | | 0.20 | % | |
Investment securities | | | | 1,652,016 | | | 13,241 | | 3.21 | % | | | 1,764,118 | | | 11,548 | | 2.62 | % | | | 1,938,053 | | | 10,956 | | 2.26 | % | | | 2,108,153 | | | 12,828 | | 2.43 | % | | | 2,758,873 | | | 16,020 | | 2.32 | % | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Originated and other loans | | | | 2,353,613 | | | 32,666 | | 5.55 | % | | | 2,065,919 | | | 29,961 | | 5.80 | % | | | 1,473,692 | | | 22,549 | | 6.12 | % | | | 1,286,191 | | | 20,483 | | 6.37 | % | | | 1,234,532 | | | 17,608 | | 5.71 | % | |
Acquired loans accounted for under ASC 310-30 | | | | 1,883,340 | | | 48,731 | | 10.35 | % | | | 2,155,889 | | | 48,351 | | 8.97 | % | | | 2,368,459 | | | 54,429 | | 9.19 | % | | | 2,555,217 | | | 47,669 | | 7.46 | % | | | 400,203 | | | 7,868 | | 7.86 | % | |
Acquired loans not accounted for under ASC 310-30 | | | | 515,909 | | | 11,168 | | 8.66 | % | | | 544,097 | | | 9,343 | | 6.87 | % | | | 836,818 | | | 14,128 | | 6.75 | % | | | 853,260 | | | 12,655 | | 5.93 | % | | | 128,000 | | | 1,264 | | 3.95 | % | |
Loans not covered under shared-loss agreements with the FDIC | | | | 4,752,862 | | | 92,565 | | 7.79 | % | | | 4,765,905 | | | 87,655 | | 7.36 | % | | | 4,678,969 | | | 91,106 | | 7.79 | % | | | 4,694,668 | | | 80,807 | | 6.89 | % | | | 1,762,735 | | | 26,740 | | 6.07 | % | |
Loans covered under shared-loss agreements with the FDIC | | | | 358,158 | | | 25,885 | | 28.91 | % | | | 366,703 | | | 21,657 | | 23.62 | % | | | 374,611 | | | 23,999 | | 25.63 | % | | | 391,003 | | | 20,229 | | 20.69 | % | | | 408,366 | | | 21,209 | | 20.77 | % | |
Total loans | | | | 5,111,020 | | | 118,450 | | 9.27 | % | | | 5,132,608 | | | 109,312 | | 8.52 | % | | | 5,053,580 | | | 115,105 | | 9.11 | % | | | 5,085,671 | | | 101,036 | | 7.95 | % | | | 2,171,101 | | | 47,949 | | 8.83 | % | |
Total interest-earning assets | | | $ | 7,295,789 | | $ | 132,057 | | 7.24 | % | | $ | 7,434,820 | | $ | 121,101 | | 6.52 | % | | $ | 7,532,671 | | $ | 126,303 | | 6.71 | % | | $ | 7,745,066 | | $ | 114,172 | | 5.90 | % | | $ | 5,898,464 | | $ | 64,443 | | 4.37 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,197,148 | | $ | 2,665 | | 0.49 | % | | $ | 2,238,161 | | $ | 2,779 | | 0.50 | % | | $ | 2,159,855 | | $ | 1,965 | | 0.36 | % | | $ | 2,219,853 | | $ | 3,741 | | 0.67 | % | | $ | 1,255,625 | | $ | 1,810 | | 0.58 | % | |
Savings accounts | | | | 1,056,645 | | | 2,347 | | 0.89 | % | | | 941,892 | | | 2,313 | | 0.98 | % | | | 893,804 | | | 3,015 | | 1.35 | % | | | 859,254 | | | 1,807 | | 0.84 | % | | | 329,161 | | | 759 | | 0.92 | % | |
Time deposits | | | | 1,510,049 | | | 5,553 | | 1.47 | % | | | 1,674,495 | | | 6,530 | | 1.56 | % | | | 1,700,949 | | | 6,683 | | 1.57 | % | | | 1,658,168 | | | 7,251 | | 1.75 | % | | | 893,465 | | | 3,752 | | 1.68 | % | |
Brokered deposits | | | | 771,248 | | | 1,610 | | 0.84 | % | | | 799,723 | | | 1,679 | | 0.84 | % | | | 858,199 | | | 1,790 | | 0.83 | % | | | 856,451 | | | 1,989 | | 0.93 | % | | | 258,851 | | | 975 | | 1.51 | % | |
| | | | 5,535,090 | | | 12,175 | | 0.88 | % | | | 5,654,271 | | | 13,301 | | 0.94 | % | | | 5,612,807 | | | 13,453 | | 0.96 | % | | | 5,593,726 | | | 14,788 | | 1.06 | % | | | 2,737,102 | | | 7,296 | | 1.07 | % | |
Purchase accounting and other adjustments | | | | - | | | (1,954) | | - | | | | - | | | (1,967) | | - | | | | - | | | (3,965) | | - | | | | - | | | (4,853) | | - | | | | - | | | (242) | | - | | |
Total deposits | | | | 5,535,090 | | | 10,221 | | 0.74 | % | | | 5,654,271 | | | 11,334 | | 0.80 | % | | | 5,612,807 | | | 9,488 | | 0.68 | % | | | 5,593,726 | | | 9,935 | | 0.71 | % | | | 2,737,102 | | | 7,054 | | 1.03 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,265,000 | | | 7,680 | | 2.43 | % | | | 1,268,544 | | | 7,211 | | 2.27 | % | | | 1,356,716 | | | 7,109 | | 2.10 | % | | | 1,525,575 | | | 7,248 | | 1.90 | % | | | 2,447,747 | | | 11,161 | | 1.82 | % | |
Advances from FHLB and other borrowings | | | | 377,422 | | | 2,344 | | 2.48 | % | | | 366,964 | | | 2,321 | | 2.53 | % | | | 408,019 | | | 2,241 | | 2.20 | % | | | 529,365 | | | 1,713 | | 1.29 | % | | | 360,972 | | | 2,311 | | 2.56 | % | |
Subordinated capital notes | | | | 99,693 | | | 1,141 | | 4.58 | % | | | 99,261 | | | 1,144 | | 4.61 | % | | | 98,648 | | | 1,170 | | 4.74 | % | | | 143,659 | | | 1,660 | | 4.62 | % | | | 52,799 | | | 507 | | 3.84 | % | |
Total borrowings | | | | 1,742,115 | | | 11,165 | | 2.56 | % | | | 1,734,769 | | | 10,676 | | 2.46 | % | | | 1,863,383 | | | 10,520 | | 2.26 | % | | | 2,198,599 | | | 10,621 | | 1.93 | % | | | 2,861,518 | | | 13,979 | | 1.95 | % | |
Total interest-bearing liabilities | | | $ | 7,277,205 | | $ | 21,386 | | 1.18 | % | | $ | 7,389,040 | | $ | 22,010 | | 1.19 | % | | $ | 7,476,190 | | $ | 20,008 | | 1.07 | % | | $ | 7,792,325 | | $ | 20,556 | | 1.06 | % | | $ | 5,598,620 | | $ | 21,033 | | 1.50 | % | |
Interest rate spread | | | | | | $ | 110,671 | | 6.06 | % | | | | | $ | 99,091 | | 5.33 | % | | | | | $ | 106,295 | | 5.64 | % | | | | | $ | 93,616 | | 4.84 | % | | | | | $ | 43,410 | | 2.87 | % | |
Interest rate margin | | | | | | | | | 6.07 | % | | | | | | | | 5.33 | % | | | | | | | | 5.64 | % | | | | | | | | 4.83 | % | | | | | | | | 2.94 | % | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin (Continued) | |
| | | 2013 YTD | | 2012 YTD | |
| | | | | Interest | | | | | | | Interest | | | | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
(Dollars in thousands) (unaudited) | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
| | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | |
Cash equivalents and securities purchased under agreements to resell | | | $ | 540,724 | | $ | 1,157 | | 0.21 | % | | $ | 758,950 | | $ | 1,658 | | 0.22 | % | |
Investment securities | | | | 1,864,058 | | | 48,573 | | 2.61 | % | | | 3,330,689 | | | 93,751 | | 2.81 | % | |
Loans | | | | | | | | | | | | | | | | | | | | |
Originated and other loans | | | | 1,725,748 | | | 105,661 | | 6.12 | % | | | 1,227,424 | | | 70,432 | | 5.74 | % | |
Acquired loans accounted for under ASC 310-30 | | | | 2,238,652 | | | 199,178 | | 8.90 | % | | | 100,597 | | | 7,866 | | 7.82 | % | |
Acquired loans not accounted for under ASC 310-30 | | | | 758,299 | | | 47,294 | | 6.24 | % | | | 32,175 | | | 1,725 | | 5.36 | % | |
Loans not covered under shared-loss agreements with the FDIC | | | | 4,722,699 | | | 352,133 | | 7.46 | % | | | 1,360,196 | | | 80,023 | | 5.88 | % | |
Loans covered under shared-loss agreements with the FDIC | | | | 372,512 | | | 91,769 | | 24.64 | % | | | 448,871 | | | 85,376 | | 19.02 | % | |
Total loans | | | | 5,095,211 | | | 443,902 | | 8.71 | % | | | 1,809,067 | | | 165,399 | | 9.14 | % | |
Total interest-earning assets | | | $ | 7,499,993 | | $ | 493,632 | | 6.58 | % | | $ | 5,898,706 | | $ | 260,808 | | 4.42 | % | |
| | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,203,787 | | $ | 11,151 | | 0.51 | % | | $ | 1,104,091 | | $ | 8,593 | | 0.78 | % | |
Savings accounts | | | | 938,450 | | | 9,481 | | 1.01 | % | | | 259,115 | | | 2,443 | | 0.94 | % | |
Time deposits | | | | 1,635,615 | | | 26,018 | | 1.59 | % | | | 822,909 | | | 15,503 | | 1.88 | % | |
Brokered deposits | | | | 821,112 | | | 7,068 | | 0.86 | % | | | 203,546 | | | 3,633 | | 1.78 | % | |
| | | | 5,598,964 | | | 53,718 | | 0.96 | % | | | 2,389,661 | | | 30,172 | | 1.26 | % | |
Purchase accounting and other adjustments | | | | - | | | (12,741) | | - | | | | - | | | (523) | | - | | |
Total deposits | | | | 5,598,964 | | | 40,977 | | 0.73 | % | | | 2,389,661 | | | 29,649 | | 1.24 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,353,011 | | | 29,249 | | 2.16 | % | | | 2,893,345 | | | 60,575 | | 2.09 | % | |
Advances from FHLB and other borrowings | | | | 419,880 | | | 8,620 | | 2.05 | % | | | 327,962 | | | 11,814 | | 3.60 | % | |
Subordinated capital notes | | | | 110,164 | | | 5,114 | | 4.64 | % | | | 40,285 | | | 1,479 | | 3.67 | % | |
Total borrowings | | | | 1,883,055 | | | 42,983 | | 2.28 | % | | | 3,261,592 | | | 73,868 | | 2.26 | % | |
Total interest-bearing liabilities | | | $ | 7,482,019 | | $ | 83,960 | | 1.12 | % | | $ | 5,651,253 | | $ | 103,517 | | 1.83 | % | |
Interest rate spread | | | | | | $ | 409,672 | | 5.46 | % | | | | | $ | 157,291 | | 2.59 | % | |
Interest rate margin | | | | | | | | | 5.46 | % | | | | | | | | 2.67 | % | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | |
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
Net Charge-offs | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Charge-offs | (21) | | $ | 3,102 | | $ | 1,758 | | $ | 29,119 | | $ | 2,588 | | $ | 1,871 |
Recoveries | | | | (6) | | | - | | | - | | | - | | | - |
Total mortgage | | | | 3,096 | | | 1,758 | | | 29,119 | | | 2,588 | | | 1,871 |
Commercial: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 211 | | | 2,234 | | | 2,887 | | | 557 | | | 658 |
Recoveries | | | | (91) | | | (28) | | | (234) | | | (28) | | | (27) |
Total commercial | | | | 120 | | | 2,206 | | | 2,653 | | | 529 | | | 631 |
Consumer: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 451 | | | 465 | | | 323 | | | 246 | | | 176 |
Recoveries | | | | (23) | | | (37) | | | (43) | | | (65) | | | (41) |
Total consumer | | | | 428 | | | 428 | | | 280 | | | 181 | | | 135 |
Auto and Leasing: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 2,496 | | | 1,305 | | | 709 | | | 91 | | | 35 |
Recoveries | | | | (713) | | | (639) | | | (209) | | | (6) | | | (19) |
Total auto and leasing | | | | 1,783 | | | 666 | | | 500 | | | 85 | | | 16 |
Total | | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 | | $ | 2,653 |
Net Charge-off Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 1.66% | | | 0.92% | | | 14.50% | | | 1.40% | | | 0.92% |
Commercial | | | | 0.04% | | | 0.95% | | | 2.64% | | | 0.56% | | | 0.76% |
Consumer | | | | 1.43% | | | 1.77% | | | 1.46% | | | 1.24% | | | 1.19% |
Auto and Leasing | | | | 2.04% | | | 0.97% | | | 1.04% | | | 0.30% | | | 0.17% |
Total | | | | 0.92% | | | 0.98% | | | 8.84% | | | 1.05% | | | 0.86% |
Period-end Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 731,345 | | $ | 714,566 | | $ | 726,664 | | $ | 773,649 | | $ | 781,207 |
GNMA's buy-back option program | | | | 34,920 | | | 32,511 | | | 32,513 | | | 20,190 | | | 25,676 |
Total mortgage | | | | 766,265 | | | 747,077 | | | 759,177 | | | 793,839 | | | 806,883 |
Commercial | | | | 1,127,657 | | | 1,173,215 | | | 702,272 | | | 459,316 | | | 349,075 |
Consumer | | | | 127,744 | | | 113,509 | | | 94,519 | | | 70,254 | | | 46,667 |
Auto and Leasing | | | | 379,874 | | | 313,701 | | | 233,092 | | | 146,689 | | | 37,577 |
Total | | | $ | 2,401,540 | | $ | 2,347,502 | | $ | 1,789,060 | | $ | 1,470,098 | | $ | 1,240,202 |
Average Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 744,989 | | $ | 763,929 | | $ | 803,272 | | $ | 740,073 | | $ | 817,681 |
Commercial | | | | 1,138,157 | | | 932,195 | | | 402,281 | | | 375,874 | | | 333,930 |
Consumer | | | | 120,110 | | | 96,529 | | | 76,551 | | | 58,170 | | | 45,530 |
Auto and Leasing | | | | 350,357 | | | 273,266 | | | 191,588 | | | 112,074 | | | 37,391 |
Total | | | $ | 2,353,613 | | $ | 2,065,919 | | $ | 1,473,692 | | $ | 1,286,191 | | $ | 1,234,532 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) |
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | $ | 71,865 | | $ | 23,119 | | $ | 23,622 | | $ | 87,147 | | $ | 68,898 |
Commercial | | | | 9,581 | | | 4,560 | | | 12,804 | | | 4,069 | | | 9,866 |
Consumer | | | | 2,665 | | | 1,983 | | | 835 | | | 680 | | | 839 |
Auto and Leasing | | | | 34,968 | | | 21,186 | | | 10,901 | | | 3,313 | | | 381 |
Total | | | $ | 119,079 | | $ | 50,848 | | $ | 48,162 | | $ | 95,209 | | $ | 79,984 |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | | 9.38% | | | 3.09% | | | 3.11% | | | 10.98% | | | 8.54% |
Commercial | | | | 0.85% | | | 0.39% | | | 1.82% | | | 0.89% | | | 2.83% |
Consumer | | | | 2.09% | | | 1.75% | | | 0.88% | | | 0.97% | | | 1.80% |
Auto and Leasing | | | | 9.21% | | | 6.75% | | | 4.68% | | | 2.26% | | | 1.01% |
Total | | | | 4.96% | | | 2.17% | | | 2.69% | | | 6.48% | | | 6.45% |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (17) (18) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 111,100 | | $ | 55,848 | | $ | 60,346 | | $ | 168,357 | | $ | 163,931 |
GNMA's buy-back option program | | | | 34,920 | | | 32,511 | | | 32,513 | | | 20,190 | | | 25,676 |
Total mortgage | | | | 146,020 | | | 88,359 | | | 92,859 | | | 188,547 | | | 189,607 |
Commercial | | | | 24,738 | | | 27,249 | | | 26,251 | | | 27,714 | | | 27,580 |
Consumer | | | | 3,315 | | | 2,408 | | | 1,205 | | | 1,021 | | | 1,248 |
Auto and Leasing | | | | 40,057 | | | 23,822 | | | 11,997 | | | 3,385 | | | 511 |
Total | | | $ | 214,130 | | $ | 141,838 | | $ | 132,312 | | $ | 220,667 | | $ | 218,946 |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (17) (18) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 14.50% | | | 7.48% | | | 7.95% | | | 21.21% | | | 20.32% |
GNMA's buy-back option program | | | | 4.56% | | | 4.35% | | | 4.28% | | | 2.54% | | | 3.18% |
Total mortgage | | | | 19.06% | | | 11.83% | | | 12.23% | | | 23.75% | | | 23.50% |
Commercial | | | | 2.19% | | | 2.32% | | | 3.74% | | | 6.03% | | | 7.90% |
Consumer | | | | 2.60% | | | 2.12% | | | 1.27% | | | 1.45% | | | 2.67% |
Auto and Leasing | | | | 10.54% | | | 7.59% | | | 5.15% | | | 2.31% | | | 1.36% |
Total | | | | 8.92% | | | 6.04% | | | 7.40% | | | 15.01% | | | 17.65% |
Nonperforming Assets | (22) | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | $ | 51,058 | | $ | 45,596 | | $ | 55,667 | | $ | 99,110 | | $ | 115,002 |
Commercial | | | | 25,373 | | | 30,837 | | | 32,430 | | | 30,756 | | | 29,506 |
Consumer | | | | 3,024 | | | 490 | | | 324 | | | 371 | | | 442 |
Auto and Leasing | | | | 6,697 | | | 2,661 | | | 35 | | | 219 | | | 131 |
Total nonperforming loans | | | | 86,152 | | | 79,584 | | | 88,456 | | | 130,456 | | | 145,081 |
Foreclosed real estate | | | | 19,305 | | | 19,885 | | | 18,995 | | | 19,025 | | | 17,380 |
Other repossessed assets | | | | 197 | | | 170 | | | 99 | | | 52 | | | 24 |
Mortgage loans held for sale | | | | - | | | 654 | | | 26,586 | | | - | | | 319 |
Total nonperforming assets | | | $ | 105,654 | | $ | 100,293 | | $ | 134,136 | | $ | 149,533 | | $ | 162,804 |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | | 6.66% | | | 6.10% | | | 7.33% | | | 12.48% | | | 14.25% |
Commercial | | | | 2.25% | | | 2.63% | | | 4.62% | | | 6.70% | | | 8.45% |
Consumer | | | | 2.37% | | | 0.43% | | | 0.34% | | | 0.53% | | | 0.95% |
Auto and Leasing | | | | 1.76% | | | 0.85% | | | 0.02% | | | 0.15% | | | 0.35% |
Total loans | | | | 3.59% | | | 3.39% | | | 4.94% | | | 8.87% | | | 11.70% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | | | | |
| | | Quarter Ended December 31, 2013 |
| | | | | | | | | Auto and | | | | |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Leasing | | Unallocated | | Total |
Non-covered loans | | | | | | | | | | | | | | | | | | | |
Originated | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 20,991 | | $ | 14,715 | | $ | 4,828 | | $ | 6,118 | | $ | 921 | | $ | 47,573 |
Provision for loan and lease losses | | | | 2,041 | | | 301 | | | 1,607 | | | 3,531 | | | (546) | | | 6,934 |
Charge-offs | | | | (3,102) | | | (211) | | | (451) | | | (2,496) | | | - | | | (6,260) |
Recoveries | | | | 6 | | | 91 | | | 23 | | | 713 | | | - | | | 833 |
Balance at end of period | | | $ | 19,936 | | $ | 14,896 | | $ | 6,007 | | $ | 7,866 | | $ | 375 | | $ | 49,080 |
| | | | | | | | | | | | | | | | | | | |
Acquired | | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | | | | |
Provision for loan and lease losses, net | | | | - | | | 1,712 | | | 418 | | | 732 | | | - | | | 2,862 |
Balance at end of period | | | $ | - | | $ | 1,712 | | $ | 418 | | $ | 732 | | $ | - | | $ | 2,862 |
| | | | | | | | | | | | | | | | | | | |
Acquired loans not accounted for under ASC 310-30 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | - | | $ | 1,361 | | $ | - | | $ | 680 | | $ | - | | $ | 2,041 |
Provision for loan and lease losses | | | | - | | | (438) | | | 1,580 | | | 1,277 | | | - | | | 2,419 |
Charge-offs | | | | - | | | - | | | (1,683) | | | (926) | | | - | | | (2,609) |
Recoveries | | | | - | | | 3 | | | 103 | | | 398 | | | - | | | 504 |
Balance at end of period | | | $ | - | | $ | 926 | | $ | - | | $ | 1,429 | | $ | - | | $ | 2,355 |
| | | | | | | | | | | | | | | | | | | |
Total non-covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 20,991 | | $ | 16,076 | | $ | 4,828 | | $ | 6,798 | | $ | 921 | | $ | 49,614 |
Provision for loan and lease losses | | | | 2,041 | | | 1,575 | | | 3,605 | | | 5,540 | | | (546) | | | 12,215 |
Charge-offs | (21) | | | (3,102) | | | (211) | | | (2,134) | | | (3,422) | | | - | | | (8,869) |
Recoveries | | | | 6 | | | 94 | | | 126 | | | 1,111 | | | - | | | 1,337 |
Balance at end of period | | | $ | 19,936 | | $ | 17,534 | | $ | 6,425 | | $ | 10,027 | | $ | 375 | | $ | 54,297 |
| | | | | | | | | | | | | | | | | | | |
Covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 9,001 | | $ | 46,935 | | $ | 619 | | $ | - | | $ | - | | $ | 56,555 |
Provision for loan and lease losses, net | | | | 3,395 | | | (3,013) | | | (4) | | | - | | | - | | | 378 |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | 99 | | | (4,303) | | | - | | | - | | | - | | | (4,204) |
Balance at end of period | | | $ | 12,495 | | $ | 39,619 | | $ | 615 | | $ | - | | $ | - | | $ | 52,729 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 |
| | | Quarter Ended December 31, 2013 |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Construction | | Auto | | Consumer | | Total |
Accretable Yield and Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Non-Covered Loans: | | | | | | | | | | | | | | | | | | | |
Accretable Yield | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 294,873 | | $ | 100,635 | | $ | 21,216 | | $ | 86,695 | | $ | 15,724 | | $ | 519,143 |
Accretion | | | | (9,370) | | | (12,866) | | | (8,808) | | | (15,147) | | | (2,540) | | | (48,731) |
Transfers from non-accretable discount | | | | 2,338 | | | 8,370 | | | 30,585 | | | 6,297 | | | (449) | | | 47,141 |
Balance at end of period | | | $ | 287,841 | | $ | 96,139 | | $ | 42,993 | | $ | 77,845 | | $ | 12,735 | | $ | 517,553 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 469,311 | | $ | 51,490 | | $ | 37,498 | | $ | 48,150 | | $ | 29,472 | | $ | 635,921 |
Principal losses | | | | (3,807) | | | (605) | | | (1,062) | | | (2,208) | | | (1,511) | | | (9,193) |
Transfers to accretable yield | | | | (2,338) | | | (8,370) | | | (30,585) | | | (6,297) | | | 449 | | | (47,141) |
Balance at end of period | | | $ | 463,166 | | $ | 42,515 | | $ | 5,851 | | $ | 39,645 | | $ | 28,410 | | $ | 579,587 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | Construction & | | | | | | | | | |
| | | | | | | | | Development | | | | | | | | | |
| | | Loans Secured | | | | | Secured by | | | | | | | | | |
| | | by 1-4 Family | | Commercial | | 1-4 Family | | | | | | | | | |
| | | Residential | | and Other | | Residential | | | | | | | | | |
| | | Properties | | Construction | | Properties | | Leasing | | Consumer | | Total |
Covered Loans: | | | | | | | | | | | | | | | | | | | |
Accretable Yield | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 56,833 | | $ | 91,718 | | $ | 3,290 | | $ | 13,878 | | $ | 2,826 | | $ | 168,545 |
Accretion | | | | (4,233) | | | (16,622) | | | (997) | | | (3,737) | | | (296) | | | (25,885) |
Transfers from non-accretable discount | | | | 650 | | | 19,997 | | | (603) | | | 97 | | | 158 | | | 20,299 |
Balance at end of period | | | $ | 53,250 | | $ | 95,093 | | $ | 1,690 | | $ | 10,238 | | $ | 2,688 | | $ | 162,959 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 42,322 | | $ | 109,163 | | $ | - | | $ | - | | $ | 9,943 | | $ | 161,428 |
Principal losses | | | | (2,490) | | | (8,074) | | | (603) | | | 97 | | | (582) | | | (11,652) |
Transfers to accretable yield | | | | (650) | | | (19,997) | | | 603 | | | (97) | | | (158) | | | (20,299) |
Balance at end of period | | | $ | 39,182 | | $ | 81,092 | | $ | - | | $ | - | | $ | 9,203 | | $ | 129,477 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures |
|
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible common equity, tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies. |
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| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 881,131 | | $ | 868,314 | | $ | 864,654 | | $ | 860,989 | | $ | 829,660 |
Less: Average noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (166,870) |
Average noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,123 | | | 8,768 |
Average total common stockholders' equity | | | $ | 715,261 | | $ | 702,444 | | $ | 698,784 | | $ | 695,112 | | $ | 671,558 |
Less: Average intangible assets | | | | (112,088) | | | (112,307) | | | (111,436) | | | (111,214) | | | (29,181) |
Average tangible common equity | | | $ | 603,173 | | $ | 590,137 | | $ | 587,348 | | $ | 583,898 | | $ | 642,377 |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 | | $ | 863,606 |
Less: Intangible assets | | | | (111,781) | | | (112,276) | | | (112,264) | | | (111,458) | | | (111,353) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,115 |
Tangible common equity | | | $ | 607,262 | | $ | 601,580 | | $ | 592,790 | | $ | 592,914 | | $ | 586,368 |
| | | | | | | | | | | | | | | | |
Common stock outstanding at end of period | | | | 45,677 | | | 45,661 | | | 45,640 | | | 45,621 | | | 45,580 |
Tangible book value | | | $ | 13.29 | | $ | 13.18 | | $ | 12.99 | | $ | 13.00 | | $ | 12.86 |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | |
Total assets | | | $ | 8,139,646 | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 |
Less: Intangible assets | | | | (111,781) | | | (112,276) | | | (112,264) | | | (111,458) | | | (111,353) |
Tangible assets | | | $ | 8,027,865 | | $ | 8,267,949 | | $ | 8,323,670 | | $ | 8,593,986 | | $ | 9,084,909 |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 607,262 | | $ | 601,580 | | $ | 592,790 | | $ | 592,914 | | $ | 586,368 |
Tangible assets | | | | 8,027,865 | | | 8,267,949 | | | 8,323,670 | | | 8,593,986 | | | 9,084,909 |
TCE ratio | | | | 7.56% | | | 7.28% | | | 7.12% | | | 6.90% | | | 6.45% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) |
|
| | | 2013 | | 2013 | | 2013 | | 2013 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 | | $ | 863,606 |
Less: Unrealized gains on available-for-sale securities, net of income tax | | | | (11,434) | | | (20,324) | | | (25,400) | | | (58,393) | | | (68,245) |
Unrealized losses on cash flow hedges, net of income tax | | | | 8,243 | | | 9,492 | | | 9,634 | | | 11,342 | | | 12,365 |
Disallowed goodwill and other intangible assets | | | | (97,981) | | | (98,625) | | | (89,584) | | | (77,867) | | | (69,388) |
Disallowed deferred tax assets | | | | (80,430) | | | (89,275) | | | (96,473) | | | (80,384) | | | (80,242) |
Disallowed servicing assets | | | | (1,380) | | | (1,365) | | | (1,299) | | | (1,154) | | | (1,079) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,115 |
Tier 1 common equity capital | | | | 536,062 | | | 513,759 | | | 501,932 | | | 497,916 | | | 491,132 |
Plus: Qualifying noncumulative perpetual preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Qualifying noncumulative perpetual preferred stock issuance costs | | | | (10,130) | | | (10,130) | | | (10,130) | | | (10,130) | | | (10,115) |
Subordinated capital notes | | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 |
Tier 1 capital | | | | 736,931 | | | 714,629 | | | 702,802 | | | 698,786 | | | 692,017 |
Plus: Long-term debt qualifying as Tier 2 capital | | | | 26,800 | | | 26,800 | | | 40,200 | | | 40,200 | | | 50,200 |
Qualifying allowance for loan and lease losses | | | | 64,700 | | | 63,292 | | | 62,683 | | | 65,475 | | | 65,971 |
Tier 2 capital | | | | 91,500 | | | 90,092 | | | 102,883 | | | 105,675 | | | 116,171 |
Total risk-based capital | | | $ | 828,431 | | $ | 804,721 | | $ | 805,685 | | $ | 804,461 | | $ | 808,188 |
| | | | | | | | | | | | | | | | |
Risk-weighted assets | | | $ | 5,130,790 | | $ | 5,019,563 | | $ | 4,975,818 | | $ | 5,207,394 | | $ | 5,249,270 |
| | | | | | | | | | | | | | | | |
Leverage ratio | | | | 9.11% | | | 8.74% | | | 8.54% | | | 8.07% | | | 6.55% |
Tier 1 common ratio | | | | 10.45% | | | 10.24% | | | 10.09% | | | 9.56% | | | 9.36% |
Tier 1 risk-based capital ratio | | | | 14.36% | | | 14.24% | | | 14.12% | | | 13.42% | | | 13.18% |
Total risk-based capital ratio | | | | 16.15% | | | 16.03% | | | 16.19% | | | 15.45% | | | 15.40% |
OFG Bancorp (NYSE: OFG) | | | |
Table 10: Notes to Financial, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 9) |
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(1) | We use the term "acquired loans" to refer to loans acquired from BBVAPR acquisition (December 18, 2012) and covered loans acquired in the Eurobank FDIC-Assisted acquisition (April 30, 2010), recorded at fair value at acquisition. The majority of these loans acquired are subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard known as ASC 310-30). Because the guidance takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with this loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. Acquired loans also include loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which at the end of the reporting period still have unamortized premium or discount. The fair value of these loans already include a credit mark for losses estimated on these loans. The allowance for loan and lease losses for these loans consider such marks applied. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans. Loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which had fully amortized their premium or discount recorded at the date of acquisition at the end of the reporting period, are removed from the acquired loans category. |
(2) | Certain prior period amounts have been reclassified to conform to the current period presentation. |
(3) | Results for Q4 2012 and thereafter include the impact of the December 18, 2012 acquisition of BBVAPR, which resulted in the addition of loans of $3.56 billion, other assets of $1.27 billion, and deposits of $3.50 billion at acquisition. |
(4) | Results for Q4 2012 include $22.9 million net loss from implementation of the second phase of the deleveraging plan in connection with the acquisition of BBVAPR Companies. During Q4 2012, Oriental sold $486 million in investment securities and paid down or early extinguished $957 million of repurchase agreement funding (repos). |
(5) | Results include merger and restructuring expenses, which include (1) planned integration and other activities related to the BBVAPR acquisition, and (2) organizational restructuring initiatives. The total acquisition related expense for 2013 was $17.5 million. |
(6) | Tax benefit for Q2 2013 includes three items: (i) $35.7 million gain from an increase in OFG's Deferred Tax Asset as a result of the Tax Amendments, which raised corporate income taxes to 39% from 30%; (ii) Q2 2013 income taxes at OFG's effective tax rate of 35.5%; and (iii) an amount to bring the Q1 2013 effective rate up to 35.5%, from the previously recorded 25.2%. |
(7) | Calculated based on net income available to common shareholders divided by average common shares outstanding for the period. |
(8) | Calculated based on net income available to common shareholders plus the preferred dividends on the convertible preferred stock, divided by total average common shares outstanding and equivalents for the period as if converted. |
(9) | Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information. |
(10) | Information includes all loans, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount. |
(11) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(12) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
(13) | Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information. |
(14) | Calculated based on non-interest expense, excluding merger and restructuring charges, for the period divided by total net interest income and total banking and financial services revenues for the period. |
(15) | The Company sells most of its conforming mortgages in the secondary market and retains servicing rights. |
(16) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(17) | Ratios for Q2 2013 do not include $59.0 million of non-performing residential mortgage loans reclassified to held-for-sale during the quarter. This loans were sold during the quarter Q3 2013. |
(18) | Delinquency is based on calendar days. This may cause fluctuations from quarter to quarter in the delinquency of mortgage loans, depending in the amount of days in each month. |
(19) | TCE ratio is a non-GAAP capital ratio. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios. |
(20) | Results for Q3 2013 includes $1.4 million loss from the sale of Oriental originated non-performing residential mortgage loans held-for-sale. |
(21) | Results for Q2 2013 includes $27.0 million charge-offs due to the reclassification to held-for-sale of non-performing residential mortgage loans with unpaid principal balance of $59.0 million. |
(22) | Loans accounted for under ASC 310-30 (Loans acquired with deteriorated credit quality, including those by analogy), including covered loans, are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. |
(23) | Growth of operating income during the period, excluding provision for acquired loan and lease losses. |
(24) | The Board of directors increased OFG's regular quaterly dividend per common share to $0.08 per share during Q4 2013. |
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